La. AG: ACORN embezzlement totaled $5M, not $1M; organization’s CEO denies allegation

La. AG: ACORN embezzlement totaled $5M, not $1M

BATON ROUGE, La. — An internal review by ACORN’s board of directors found that $5 million was embezzled from the community organization, far more than a previously reported sum of $1 million, according to documents from the Louisiana attorney general’s office.

The new amount was reported in a subpoena released Monday from an investigation by Attorney General Buddy Caldwell. It is unclear if the money was taken from state, federal or private funds, according to the subpoena.

ACORN Chief Executive Officer Bertha Lewis said the new embezzlement allegation is “completely false.” She said she would comment further after she and ACORN attorneys have a chance to review the subpoena.

Caldwell issued subpoenas in August seeking documents related to ACORN International then-President Wade Rathke and his brother, Dale Rathke, who kept the group’s books. Those subpoenas targeted possible violations of state employee tax law, obstruction of justice and violations of the Employee Retirement Security Act.

The attorney general made inquiries in June into alleged embezzlement within ACORN that happened 10 years ago. The group last year dealt with an internal dispute and a lawsuit involving accusations that Dale Rathke made nearly $1 million in improper credit card charges in 1999 and 2000. Rathke’s brother and a donor repaid the money.

But Caldwell said last month that the statute of limitations prevented prosecutors from taking action on the alleged embezzlement, and that his investigation was not focused on that issue.

The subpoena issued Monday puts a new emphasis on the embezzlement issue. It appears to be in reaction to documents gathered from ACORN’s board as a result of the subpoenas issued in August.

“Current high ranking members of ACORN have publicly acknowledged that embezzlement did in fact occur, but the exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on Oct. 17, 2008, by Bertha Lewis and Liz Wolf that an internal review had determined that the amount embezzled was $5 million,” the new subpoena says.

The subpoena requests documents from Citizens Consulting Inc., which assisted ACORN, and from various accounting and legal consultants in New Orleans.

Wade Rathke could not be reached immediately for comment.